Here is a new essay from Golem XIV that asks the simple question, 'Why are we still bailing out the banks?'
As you know my conclusion has been the power of the status quo and the intractable nature of the credibility trap, going back as far as the economic forecast from 2005.
Why should the rich and powerful stop what they are doing when greed feels so good? At some point the frenzy is so powerful all one can say is 'more.' They cannot help themselves. It is like an addiction, like endless war.
And the downside of reform is not only spoiling you and your fellows 'good thing,' and incurring their displeasure, but perhaps also implicating yourself. Favors and hidden knowledge go a long way in the halls of power.
Plausible deniability, obfuscation, and the excuse of poor but honestly mistaken judgement are the standard defenses employed by modern financial management, CEOs, and even former chairmen of the Federal Reserve.
What is most fascinating is that this compulsion to bail out the banks has swept the leadership of the West with little or no dissent, except for a few unruly victims, at least for now. And maybe Iceland.
Fascism had its fashion in the 1930's. So why not some new fashionable idea now, as irrational as it may seem? Not the fascism of the jackboot, but a more subtle and clever autocracy of the financial system. None shall buy or sell...
This is nothing new. Roosevelt is said to have saved capitalism from the capitalists, and Churchill saved Britain from the collaborators and appeasers. What if there had been no Roosevelt, or Churchill? What if the face of fascism had not become a raving Hitler, but a Mussolini and a Franco and a Mosley, practical men of business with industrial appeal, worthy of fawning cameos on the cover of Time Magazine?
It is the real motives that are more of a puzzle. Could such destruction be caused by simple greed and a lust for power? There is some precedent for this.
Why are we bailing out the banks? Part One. The Simple Answer.
by Golem XIV
October 8, 2012
We’ve all seen the film ‘Groundhog Day’. Well, we’re in it. Every morning the radio plays a song which has the chorus, “I rob you babe”. And sure enough when the news comes on, they have. A full five years of pumping money in to the banks and still our leaders will not even consider that they might be wrong. They still insist, as they have from the start, that “There is no alternative’. Call it bail outs, call it QE, call it monetary policy, rescue or suicide, it doesn’t matter. What matters is we’re still doing it.
When our leaders embarked on their policy of bailing out the banks’ private debts, even those of us like me, who believed our rulers were hideously wrong to do so, still harboured a hope that they were at least sincere; that they really were, as they claimed, trying to fix things for all of us. I find this impossible to believe now. If any of the bankers, their experts and our politicians ever were sincere when they claimed we would all be in this together, it now seems terribly clear that none of them has any intention of being with us in what is being forced upon us now.
Just this morning George Osborne and his lick spittle coalition partners have agreed to another £10 billion in cuts to welfare, health, education and the rest while saying that imposing any further taxes on the wealthier will have to wait. They promise to look at that …soon. Promise.
The problem with discussing why we are bailing out the banks is that in the 5 years since the bank debt implosion began, ‘saving’ the banks has now become enmeshed in – and in the headlines replaced by – what the banks and our rulers absolutely insist is an entirely separate ‘crisis’. The financial world and their political friends in all parties have spent two years trying to brainwash us, that the problem is no longer the banks but is a ‘crisis’ of public, sovereign overspend and indebtedness. Putting money in to the banks is now seen as a technical matter rather than anything the public should concern itself about. Indeed there is a desire to return to the idea that the public must stop feeling they should be entitled to have a ‘concern’ about things too technical for them to comprehend ‘in the right way’. The ‘right way’ is to understand that the proper concern of the public should be cutting what the financial experts tell us is the terrible debt problem caused by too much public spending.
The ‘right way’ makes no further mention of public money still supporting the banks nor of the billions more being printed up right now so yet more public money can be lent to them. In fact the right way insists there is no connection between the huge sums nations have pumped in to the banks and the sudden ballooning of sovereign debt in those nations. The ‘right way’ means refusing to see any connection whatever between policies of cutting public spending in the real economy and a shrinking of that economy. No connection at all…obviously. Any economic Phd can see that.
5 years on and more people are more confused than ever. People cannot understand how the same politicians can insist it is essential to keep ‘helping’ the banks with ever larger sums (trillion is the new billion) regardless of what debt it incurs, while with equal fervor insisting it is absolutely imperative that we cut spending on anything other than the banks – because we are in debt. And so with their certainties chained to our legs, we are sinking in to a mire of suffocating confusion, lies and fraud.
Sometimes in a world of increasing confusion it is good to ask simple questions. Why are we bailing out the banks?..."
Read the entire essay including the 'simple answer' here.